This news analysis at the Economist should be required reading at this point in the course. As the available supply of houses increases (above), the price should drop, market values decline, and the wealth effect in reverse kicks in.
Saturday, December 02, 2006
News analysis at the Economist
This news analysis at the Economist should be required reading at this point in the course. As the available supply of houses increases (above), the price should drop, market values decline, and the wealth effect in reverse kicks in.
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3 comments:
The entire article talks of how the housing market is slowing down or actually declining in some cases. This is then followed by the stating of both how this is good and bad for the economy and how it could be that the housing bubble could not be over at all. If anything I came away from this article with no new information seeing as none was supplied. Even the whole reverse Wealth affect is intuitive and did not need explaining. In all the main point was the uncertaintly of our short and long term economic prosperity, which was already evident through the slumping of sales in the summer which continued into november so far.
Well then, why would the Economist waste your time if it was so intuitive? There is more to the article.
I have to agree with Dan, well I don’t have to but in this case I certainly do. Truthfully the article did little to show what the current trends are caused by or what they signal for the future market. This article seemed to say that economists were right and that the housing market is declining, but then again the economists were wrong because the market isn’t declining that much. But this must signal that the market is on the verge of collapse and those darn economists were right after all. Or possibly the market isn’t as weak as previously thought and this simply proves that. Anyway you take this article it takes you no where.
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